The Creso Pharma Ltd (ASX: CPH) share price is trading lower on Friday despite the release of a positive announcement.
At the time of writing, the cannabis company's shares are down over 2% to 22.5 cents.
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What did Creso Pharma announce?
This morning Creso Pharma announced that its wholly owned Canadian subsidiary, Mernova Medicinal, has secured three new purchase orders.
According to the release, the orders have a total value of C$177,122.40 (A$183,019.551) and include the first purchase order for Mernova's Pre-roll Joint range, sold under the Ritual Sticks brand.
The release explains that the Ritual Sticks offering is comprised of new Pre-roll Joints which utilise the company's top-quality indoor grown, hand trimmed, hang dried, cured, artisanal, craft cannabis.
The company advised that to produce the line of Pre-roll Joints, Mernova exclusively utilises only the same high-quality cannabis that is sold under the Ritual Green brand.
The launch of the offering follows considerable product development initiatives, as well as a lengthy registration process with Health Canada.
Management notes that the Pre-roll market unlocks another significant addressable market for Mernova.
"A major achievement"
Mernova's Managing Director, Jack Yu, believes this purchase order is a major achievement for the business.
He said: "Receiving our first PO for our Ritual Sticks brand of Pre-roll Joints is a major achievement for Mernova, and is the result of considerable R&D to select the right equipment and develop our processes. We wanted to produce the best Pre-roll joints possible, and are very excited to get our new products in the hands of customers in the coming weeks, so that they can provide their feedback."
"One thing that sets us apart is that we use only the same high-quality cannabis as sold under our Ritual Green brand of dried flower. We expect these products to open a much broader market for Mernova, as they are priced as entry-level products, which should help introduce our products to a much larger customer base, and they offer a level of convenience that many will appreciate."
Mr Yu revealed that Mernova is experiencing strong sales growth and appears confident this will continue.
He explained: "Mernova continues to witness very strong sales growth and the additional purchase orders received recently are validation of this. Our brand recognition has increased considerably over the last few months, particularly in Nova Scotia, and Mernova has generated a reputation as one of the best craft cannabis growers in Canada. Most importantly, our ongoing sales growth has put the business on a fast track towards a stable, and recurring revenue-generating model."
"We expect demand for our products to continue, particularly with the introduction of our Pre-roll Joint range, and we look forward to updating shareholders on new purchase orders in the near term," he concluded.
